John Paulson recently apologized to his investors about his funds' awful performance this year. But at least one client has nothing to complain about.
That's because Paulson several years ago agreed to backstop any losses suffered by the 92nd Street Y, one of New York's premier cultural institutions. Paulson serves on the Y's board, and his Paulson & Co. is the Y's largest outside money manager, running more than a quarter of its $37.9 million in investments.
Paulson isn't the only Y money manager who made that deal; three others have as well, including fellow board member Curtis Schenker of Scoggin Capital Management and Eminence Capital, whose head's wife also serves on the board. But Paulson is probably the only one on the hook for as much as $4 million.
"We're certainly not ashamed of any of this," Y executive director Sol Adler told The New York Times. "This institution has particularly generous board members, including John and a number of others."
In addition to serving on the Y's board, Paulson also sent his two daughters to the institution's exclusive preschool and nursery school.